News / Containership demolition at its lowest level since the pandemic

© Joe Myerscough

Containership scrapping is set to fall to a three-year low this year, as the liner operators’ relentless chase for market share continues, keeping charter rates and resale prices high.

Statistics compiled by Linerlytica show so far this year only 14 box ships, with a total capacity of 9,857 teu, have been scrapped.

Demolitions have not been this low since 2022, when just three feeder ships for 2,848 teu were broken up during the Covid era that saw freight and charter rates reaching historical highs.

Linerlytica said: “No new scrap sales are expected in December, as the high charter rates are keeping older ships from the scrapyard.”

The consultancy added that, with more than 1,690 ships (4.4m teu) being more than 20 years old, the number scrapped would need to accelerate over the next five years to keep supply and demand in balance – the newbuild orderbook has swelled to a record high of 11.25m teu.

The orderbook-to-fleet ratio is now 34%, the highest number of orders since the global financial crisis in 2008.

Clarksons figures show that at the start of this month, the containership fleet stood at 7,007 (32.7m teu), after passing the 7,000-vessel mark last month.

In the past decade, the year 2016 saw the highest number of containership demolitions, with nearly 700,000 teu scrapped amid depressed freight and charter rates.

But, despite the softening freight market, liner operators hunting tonnage are still driving up charter rates and second-hand ship prices, alongside the newbuild shopping spree.

But while the supply-demand outlook looks imbalanced, much depends on whether vessels resume transits through the Suez Canal.

CMA CGM has stopped its ad-hoc re-direction of its ships via the canal on the Asia-Europe route after three recent voyages, and other main carriers are still unwilling to begin redeployment yet.